In the 1940 case of Helvering v. Le Gierse, the United States Supreme Court ruled that a life insurance policy and an annuity contract purchased by a woman from the same company could not be considered separate transactions for tax purposes. The court held that because both contracts were interdependent, they should be treated as one transaction in which no "insurance risk" was present. As such, upon her death, proceeds from these policies were subject to federal estate taxes under Section 302(g) of the Revenue Act of 1926. This decision established precedent regarding taxation on combined life insurance and annuity contracts when there is no transfer of risk involved.

In the dissenting opinion for Helvering v. Le Gierse, Justice McReynolds argued that the majority's decision was a departure from established principles of insurance and taxation law. He contended that Mrs. Le Gierse had entered into two separate contracts - one for life insurance and another for an annuity - each with its own distinct considerations and risks. The fact that she purchased both policies on the same day did not make them interdependent or part of a single transaction as suggested by the majority opinion. Furthermore, he disagreed with their interpretation of Section 302(g) of Revenue Act which exempts proceeds from life insurance policies from gross estate calculations; in his view, this exemption should apply regardless if other transactions were involved simultaneously or not.